Countyside Alliance seeks fuel tax cuts to ease rural costs

The Countryside Alliance is urging the chancellor to make the 5p/litre fuel duty cut permanent and temporarily reduce VAT on fuel, warning that rising costs are placing rural households and farm businesses under increasing pressure.

In a letter to chancellor John Healey ahead of the 28 October Budget, the organisation said rural communities were disproportionately affected by higher fuel prices because of their reliance on private vehicles and the cost of operating businesses in remote areas.

See also: Red diesel price volatility hits autumn fieldwork

Chief executive Tim Bonner said making the fuel duty cut permanent and easing VAT would make a genuine difference to rural household and business bills as winter approaches.

The 5p/litre cut was introduced in March 2022 and applies to road fuel, including petrol and white diesel.

The government has extended the temporary reduction until 31 December 2026, with the rate currently standing at 52.95p/litre for both petrol and road diesel.

The Countryside Alliance wants the relief to become permanent rather than allowing duty to rise again.

Red diesel relief

Farmers using red diesel have also received support, although the arrangements differ from those for road fuel.

Red diesel is subject to a much lower rate of fuel duty because it can be used for eligible off-road purposes, including agricultural machinery. Its duty rate was 10.18p/litre before a further temporary reduction was announced in May 2026.

From 15 June, the government cut the rate to 6.48p/litre, a reduction of 3.7p/litre, until 31 December 2026. This relief is separate from the 5p/litre cut on road fuel.

The additional relief was introduced in response to rising fuel costs linked to conflict in the Middle East. However, lower duty does not necessarily translate into an equivalent reduction in the price paid by farmers, which is also affected by wholesale prices and distribution costs.

According to RAC Fuel Watch, the average price of diesel in the UK is 199.4p/litre, and petrol is 174.37p/litre.

There is no official national average for red diesel because prices vary by supplier, region and delivery arrangements. However, UK farmers are currently paying 113.4p/litre, according to the Farmers Weekly Fuel Prices Tracker, up from 112.6p/litre last week.

The average price of red diesel has doubled in the past year from 66.9p/litre, underlining the pressure fuel costs continue to place on farm businesses.

Both the white diesel and red diesel duty reductions are currently temporary. Unless further changes are announced, rates are scheduled to begin rising again from January 2027.

Further asks

The Countryside Alliance is also urging ministers to temporarily reduce the standard 20% VAT on fuel and scrap the 5% VAT charge on domestic heating oil, to ease pressure on rural households that rely on off-grid energy supplies.

Its wider Budget demands include changes to inheritance tax relief for farms and support for rural employers.

The UK government maintains a strict stance of not commenting on speculation ahead of fiscal events, a policy frequently reiterated by the Treasury regarding upcoming budgets and agricultural funding.